There are many ways for well-intentioned men and women to donate to charity. Cash donations can be extremely valuable, as they allow charities to allocate funds immediately and in ways that serves their most glaring needs. Noncash donations can be valuable as well, though certain noncash donations may not go as far as donors think they might.
According to CharityWatch, an organization that monitors charitable organizations, donating used cars is among the least cost-effective ways to donate to charity. That’s because many organizations that accept automobiles as donations are not actually charities, but for-profit intermediaries, even though they rarely represent themselves as such. Such organizations accept donated automobiles, but they may just give a small percentage of the proceeds from those vehicles to charities. In fact, a 2017 report from MSNBC noted that attorneys general in multiple states investigated auto donation charities for false advertising.
When donating automobiles, men and women may be better off selling the cars themselves and then donating the proceeds from the sale to their favorite charity. Adults who do not have time to sell vehicles on their own can still donate their vehicles to charity, but it’s wise to employ a few savvy donation strategies when doing so.
• Remove the middle man. The charity watchdog organization Charity Navigator advises prospective donors to avoid for-profit intermediary organizations altogether when donating vehicles. By donating the vehicle directly to a charity that will handle the transaction themselves, donors can ensure 100 percent of the profits go to the charity. Charity Navigator even notes that many charities already have auto donation programs, even if they do not advertise such services.
• Protect yourself when donating. Donors may be vulnerable to certain penalties if they don’t formally sign their vehicles over to the nonprofit organization when donating them. Charity Navigator notes that some charities may ask donors to avoid officially signing over the vehicle so they don’t have to re-title it. However, doing so means donors are responsible for any parking tickets issued to the vehicle and may even be liable if the car is used in the commission of a crime.
• Complete necessary paperwork. When donating the vehicle, make sure you receive and keep all documentation provided by the charity. The documentation you need and the forms you will have to fill out for your tax returns will depend on the value of the car, so maintain contact with the charity even after donating the vehicle. The organization should be able to help you and advise on which forms will be necessary to claim your deduction.
Additional information about donating cars to charity can be found at www.charitynavigator.org.
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